23 April 2002
CIMA welcomes the appointment of Derek Higgs to head the Government review of the role of non-executive directors (NEDs). NEDs are central to ensuring robust corporate governance and the more effective running of company boards, and now is the opportunity to enhance their role.
CIMA strongly advocated the key role of NEDs in evidence recently presented to the Treasury Select Committee, which is currently investigating the financial regulation of UK public limited companies.
CIMA’s main proposal to the Committee was the need for a Code of Best Practice for the role, and professionalism of non-executive directors. This should be developed by a group of relevant stakeholders and should address NEDs’:
CIMA suggests that the Listing Authority (now part of the Financial Services Authority (FSA)) should adopt this Code, which would set out guidance for best practice. CIMA also suggests that the FSA should communicate with all directors of listed companies, drawing attention to, and emphasising their existing responsibilities under the Combined Code and the need for strong corporate governance.
Charles Tilley, Chief Executive, CIMA, said:
'CIMA strongly supports and will input fully into the review of the role of NEDs. We will be suggesting that the review’s final recommendations allow companies the scope to apply corporate governance principles flexibly and specific to the attainment of each company’s objectives. As such, we would preserve the strengths of the Combined Code and its 'comply or explain' approach, rather than converting any of the Code’s contents into regulation or other such prescriptive requirements.'
You can download CIMA’s written submission to the Treasury Select Committee from this page.
If you would like more information please contact Lottie Muir
Phone: +44 (0)20 8849 2407
Email: lottie.muir@cimaglobal.com
